A Retail Icon Sounds Off

Though he's 85 years old and years removed from managing the day-to-day operations of the company he founded, A. Alfred Taubman rattles off industry statistics at the drop of a hat.

“The average mall did $396 per square foot. That's what you printed. We did $549 per square foot,” he says to me while sitting at his desk in his 38th-floor New York City office. “We reported $539, but we really did $549. That's $150 a square foot higher. Where does that come from? We must be doing something right.”

Taubman Centers is known now for its upscale collection of regional malls and open-air centers and for years has led all mall REITs in sales per square foot. The roots of its success lie with the founder, who has decided to share some of the secrets of his success. In mid-April Collins, an imprint of HarperCollins Publishers, released Taubman's memoir, Threshold Resistance: The Extraordinary Career of a Luxury Retailing Pioneer. (For Retail Traffic's review, go here.)

For Taubman, every business decision he's made in his career — from how to put together malls and buying Sotheby's auction house to owning A&W restaurants — has been about overcoming “threshold resistance.” By that, Taubman means the wall (often psychological) that prevents mall visitors from entering a particular store or restaurant, and if they do, what keeps them from making a purchase.

“I have always pictured this in my mind,” he says. “If you walk down the aisle of the department store, for example, you get a sea of goods. Everything is available to you to touch. And, the feel of garments are very important in terms of selling. That is as important as the visual.” The store layout and displays are designed to entice consumers to browse, feel the garments and eventually make a purchase.

Cross boundaries

For Taubman, it isn't a leap from laying out an individual store to designing a shopping complex. Taubman says, he and Jim Rouse, founder of the Rouse Co., another key figure who influenced the retail real estate landscape, differ on that ideology.

“I used to kid him that he would tenant his centers like he cut a piece of salami, he'd just slide in the next tenant in whatever space opened up,” Taubman says. “It was his theory that you should replicate downtowns, and that's how they developed. Everything belongs where it ends up.”

For Taubman, that makes about as much sense as putting the men's shoe department in the middle of the cosmetics section.

“Women buy a dress and then find shoes to go with it,” he says. “Men buy suits and then pick their shoes.” Shopping center tenants, then, should be coordinated similarly. Breaking down threshold resistance is integral to the design of malls today; from determining where to place escalators and elevators to the type of flooring. It even comes into play when figuring the distance between anchors to the total length of the center (he advises: avoid going beyond 1,000 feet).

Taubman also applied his “threshold resistance” principle to his acquisition of Sotheby's. He says the auction house was limiting itself by not creating a more welcoming environment. He pushed through redesigns of its auction and display spaces, making them more inviting. Taubman was credited for turning Sotheby's around, only to be accused of conspiracy for price-fixing. He was convicted and spent one year and a day in prison.

Taubman even weighs in on the escalating trend of mixed-use developments and open-air centers. With open-air centers, Taubman says, there's always the thought to add amenities and increase spending on landscaping.

But Taubman says, it's important to not go overboard. “It is the developer's responsibility to give every shop at the mall an opportunity at every customer. If you don't do that, you've lost it,” he says.

He draws an analogy by talking about a hard lesson he learned when his company brought the Chicago Symphony to Woodfields Mall in the 1970s.

“It was beautiful. It was marvelous, but when I got to the mall, which closed at 10, at 8:15 I realized, ‘Damn, there isn't anyone in any of the stores,’” he recalls. “What exactly did we accomplish here? It was a nice idea to entertain people. On the other hand, what's our responsibility? Is it to pull people out of stores? I mean, by the time they quit playing all the stores were closed!”

It's these firsthand accounts that Taubman shares in the 212-page book, which serves as part autobiography and part history of shopping centers. Taubman argues the industry's roots go back to ancient Greek, Roman and Turkish cultures, among others.

Why now?

Taubman long ago handed over day-to-day control of the mall company. He maintains an office in Taubman Co.'s New York location. He now splits his time between houses in New York, the Hamptons, Florida and back in Michigan. With some time on his hands (and some goading from Tipping Point author Malcolm Gladwell), Taubman felt it was time to share these personal and professional experiences and sit down and write Threshold Resistance.

“I wanted to leave my thoughts to my family while I'm still able to think clearly,” Taubman says with a smile. “This is the time you write a memoir for your family or anyone else that wants to know what you did or didn't do with your life. I've always felt that I handled myself in business well and I was an honorable part of the shopping center profession.… But it was always sort of a mystery. How does he do things? Now people will know.”